Bank of China contributes to $1 billion syndicated loan to Sonangol for general corporate purposes in February 2016

📋 Staff Comments

1. For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
2. A pre-export finance (PXF) facility an arrangement in which a commodity (e.g. oil) producer gets up-front cash from a customer in return for a promise to repay the customer with that commodity (possibly at a discount) in the future. PXF funds may be advanced by a lender or syndicate of lenders to a commodity producer to assist the company in meeting either its working capital needs (for example, to cover the purchase of raw materials and costs associated with processing, storage and transport) or its capital investment needs (for example, investment in plant and machinery and other elements of infrastructure). PXF facilities are usually secured by (1) an assignment of rights by the producer under an ‘offtake contract’ (i.e., a sale and purchase contract between the producer and a buyer of that producer of goods or commodities), and (2) a collection account charge over a bank account into which proceeds due to the producer from the buyer of the goods or commodities under the offtake contract are credited. There are two key documents in prepayment finance transactions: a contract providing for the advance payment by the offtaker to the producer for the purchase of goods/commodities (the 'Prepayment Contract'), and a loan agreement between a lender and the offtaker (the 'Offtaker Loan Agreement') under which the advance payment is financed.
3. The loan is also known as a receivables purchase agreement facility.
4. In August 2015, Sonangol appointed three senior banks -- Natixis, Standard Chartered and Standard Bank — to pre-fund the deal before the loan went into general syndication. Seven banks joined the three senior lenders in syndication. They were BAI, China Minsheng Banking, Commerzbank, Intesa Sanpaolo, and Sumitomo Mitsui Banking Corporation. Chinese banks reportedly ‘joined with large tickets.’ 5. The size of Bank of China’s contribution to the lending syndicate is unknown. For the time being, AidData assumes equal contributions across the 10 known members of the syndicate ($100 million).

📚 Sources & References

• Sonangol signs $1bn after lengthy syndication
• February 2016 GlobalCapital - Sonangol signs $1bn after lengthy syndication
• Russia hogs focus with RFP
• Sonangol grabs $1bn loan
• Sonangol Annual Report 2017
• Oil slump sends Africans scrambling to loan mart for funds as revenues fall
• Loan Market Data and Analytics
• Angola's Sonangol secures funding from British bank
• Sonangol Annual Report 2015 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.